Debt Levels in Africa Rising – IMF
THE International Monetary Fund (IMF) has expressed concerns about the rising debt in the sub-Saharan African countries, including Ghana.
According to a 2018 Regional Economic Outlook survey report, debt levels in sub-Saharan African countries has continued to rise causing countries to rely on public investment driven growth with rising debt levels.
This was outdoored by a team of IMF officials yesterday at an event in Accra, which had the Vice-President, Dr Mahamudu Bawumia, as the Guest of Honour.
About 40 per cent of low-income countries in the Sub-Saharan Africa region, according to the report “are now assessed as being in debt distress or at high risk of debt distress.”
It identified domestic revenue mobilisation as one of the most pressing policy challenges facing sub-Saharan African countries.
“Nearly all countries are seeking to raise revenue to make progress toward their Sustainable Development Goals (SDG) while preserving fiscal sustainability. Despite substantial progress in revenue mobilisation over the past two decades, sub-Saharan Africa still the region with the lowest revenue-to-GDP ratio,” the report indicated.
Regarding private investment, the report said while public investment in the region was at a similar level to other regions of the world, private investment in sub-Saharan Africa lagged well below all other regions.
“Empirical work suggests that the strength of current and prospective economic activity plays a dominant role in driving private firms’ decision to invest,” it added.
However, the report noted that sub-Saharan Africa was set to enjoy a modest growth uptick, indicating that the average growth rate in the region “is projected to rise from 2.8 per cent in 2017 to 3.4 per cent in 2018, with growth accelerating in about two-thirds of the countries in the region”.
Speaking at the event, Dr Bawumia restated government’s readiness to enhance its domestic revenue mobilisation to drive home its economic transformational agenda.
According to him, there was the need for the mobilisation of domestic revenue to finance infrastructural development, adding that the Ghana Beyond Aid agenda sought to focus on that direction.
He further disclosed that government would embark on reforms that would stimulate private sector and position them to contribute towards the country’s development growth.
Present at the event were the Minister of Finance and Economic Planning, Mr Ken Ofori-Attah, and Senior Minister, Mr Yaw Osafo-Marfo.
The IMF officials that delivered the report were the Director in-charge of African Development of IMF, Mr Abebe Aemro Selassie, the Mission Chief for Ghana, Mrs Annalisa Fedelino and the Division Chief in charge of Regional Studies Dvision of IMF, Papa M Bagnick N’Diaye.
This year’s report focused on Domestic Revenue Mobilisation and Private Investment.